The Role of Feedback in Building a Strong Culture of Performance: Best Practices for Leaders

Feedback is integral to employee management since it paves the way for improvement across roles and teams.

Setting up a feedback culture in your company facilitates productivity, clear communication, and holistic growth in your workforce. Applauding efforts through positive feedback and respectfully offering constructive criticism boosts morale and helps employees improve.

However, your feedback system must be a two-way street to build a sustainable performance culture. Employees should feel comfortable enough to share their opinions with the leadership. This way, a company can seize every opportunity for improvement, whether in the workforce or the leadership.

However, for most managers, giving feedback is a less desirable task. The lack of structure in the feedback system alienates the workforce and leaves loose ends.

So what does an effective feedback loop look like? How can leaders master it? Let’s dive into the answers.

The Role of Providing Feedback as a Leader

In every company, feedback from the leadership is crucial to managing progress across teams effectively. It helps employees shape their approach in a way that drives mutual growth.

According to reports, companies implementing regular employee feedback see 14.9% lower turnover rates, and 4 of 10 employees start actively disengaging when they don’t get feedback.

Let’s understand the impact of a leadership-facilitated strong feedback loop on an organization:

1. Helps set clear expectations and goals

For every leader, team communication is the cornerstone of their role. But the absence of regular feedback from the leadership compromises clear and insightful interaction between managers and the workforce.

The role of leadership is to help employees navigate and achieve collective growth. That’s where regular feedback can help. By making an active effort to review employee performance and pointing out areas of improvement, expectations become clear.

Collecting feedback from leaders points out roadblocks and eliminates them, making it easier to reach targets and objectives. Employees learn from their mistakes and understand what they need to do to elevate their performance.

With constructive criticism, new employees learn the ways of the organization and what the leadership expects of them. It also helps identify performing indicators, and experienced employees understand their progress toward company goals.

Clear expectations also improve employee satisfaction, as they know exactly what tasks they must complete each day and what standards are expected of them.

2. Shows the importance of employee work

A lack of feedback can make employees feel undervalued. It may seem like the leadership doesn’t notice their contribution.

A structured feedback program creates excellent recognition opportunities. When managers take time to examine performance and offer feedback, employees feel appreciated. Employees understand that their work makes a difference in the company and become more engaged. Engaged employees put more effort into their responsibilities and ensure your organization’s agility.

For example—Cargill, a food producer, and distributor based in Minneapolis, is a 150-year-old company with about 160,000 employees around the globe. The company struggled to keep employee engagement high in such a huge workforce.

They shifted their focus from annual reviews and pivoted to the “Everyday Performance Management” system to find a solution. It is a strategic blend of encouragement, feedback, and motivation in daily, on-the-job conversations between employees and leadership.

As a result, the company saw massive improvements. Almost 70% of Cargill employees reported they received practical feedback from leadership and felt valued.

3. Offers specific and actionable feedback

Instead of yelling at an employee for a mistake, a strategic feedback system from leadership can help them correct it. Managers must ensure that the performance reviews are thorough and highlight the strengths and weaknesses of the employee.

Saying what not to do is not enough. As the superior, you must also direct them to what needs to be done. Include tangible data to make employees understand why something didn’t work. This will make the conversation specific and actionable.

4. Helps highlight areas of improvement

Employees don’t always know where their performance is lacking. Chances are, most of your workforce wants to do better and grow their career.

Feedback allows them to understand the weak points and work on them. When managers point out areas of improvement, employees strive to raise their performance to the organizational standard.

Many leaders use the sandwich feedback technique to soften the blow of negative feedback. In this method, a manager offers one critique ‘sandwiched’ between two positive feedback. It makes the employee feel recognized for a job well done. In turn, they become motivated to work on the negative feedback and do better.

By highlighting areas of improvement, leaders help employees grow not only as a part of the company but also as independent professionals.

5. Encourages self-reflection and self-evaluation

Feedback is an important tool for creating a habit of self-awareness. There is often a gap between how employees see themselves and how the management perceives their contribution. Feedback bridges this gap and creates alignment in the manager-employee relationship.

When a feedback session aligns or counters employee perception, it helps them self-evaluate their performance. Employees reflect on their performance and try to understand what holds them back. This develops a habit of self-reflection, which is useful in their personal growth and professional ambitions.

The Role of Receiving Feedback as a Leader

To create a strong culture of mutual growth and performance, leaders need to be as good at receiving feedback as giving it to the employee. This creates an environment of transparency, fosters trust in leadership, and makes your employees more confident about their capabilities.

When leaders keep their doors open for feedback, they bring the following positives to the organization:

1. Create a safe and open environment

If your company’s feedback system is one-way, it might intimidate or threaten your workforce. They will not be open to sharing their problems or suggestions and the company will miss improvement opportunities.

When a leader encourages feedback and receives them graciously, it creates a safe environment for the workers. They feel valued and confident enough to offer their opinions. An open work culture reduces stress and improves employee experience.

For example, Bridgewater Associates, the world’s largest hedge fund firm, eliminated their closed-door policy and facilitated ‘radical transparency’ through open feedback.

At Bridgewater, employees know unconventional thinking and even disagreements are appreciated in their workplace. They find it safe to offer ideas and even constructive criticisms. According to the founder Ray Dalio, this allows the best ideas to come to light.

2. Encourage feedback from all levels of the organization

When leaders are open to receiving feedback, they encourage out-of-the-box ideas and opinions from every tier of the workforce. In a transparent work culture, junior employees feel confident enough to share suggestions because they are encouraged to do so.

Getting feedback from all levels of the organization will help you find untapped opportunities. For instance, understanding e-commerce data can give you insights into emerging trends and potential growth areas for your business.

Netflix has a dedicated “Feedback” section on its recruitment page. It explains how the company has made feedback a part of their daily work life, not just an annual formality.

The company encourages courage and selflessness while offering feedback to your colleagues.

Netflix’s communication relies on three things:

Open and deliberate feedback sharing

Being thoroughly candid with each other

Independent decision-making among employees.

Netflix understands that communication depends on trust and positive intent, so they invest in developing strong professional relationships. This encourages candor among all employees, regardless of their position in the company.

3. Foster a culture of growth via feedback

Even if you hold a leadership position in your company, there are always areas for improvement. The manager must point these out to their employees. But openly receiving feedback from employees can highlight unseen prospects of growth.

As the frequency of feedback exchange increases, leaders will get more detailed insights into their performance quality. This way, they can hone their leadership skills and drive growth in their career and for the company.

4. Help with decision-making processes

For sustainable growth, companies integrate workforce wisdom into decision-making.

Employees are the ones who deal directly with your customers and manage operations. Inclusive decision-making will help you gather different perspectives and make better business decisions.

When employees are encouraged to have contradictory opinions, they can point out the flaws in different initiatives. This allows you to make improvements early on and avoid mistakes.
Feedback from your employees can give you precise insights into the operations at all levels. This will help you make informed decisions and avoid crisis escalation.

For example, Screwfix, a hardware company, has fostered an excellent 360° feedback model in their company. Their employees are deeply invested in the company’s operations since they can voice their ideas and opinions.

This feedback culture even led to the company starting ‘customer cards’, which help with swift purchases.

5. Empower employees

Employees to feel heard and appreciated when leaders listen to constructive criticisms and actively work on them. This builds an empowering ecosystem within your organization and instills employee confidence.

Receiving feedback as a leader also encourages independent thinking in the workforce. Instead of sticking to their prescribed roles exclusively, employees become more involved with the company’s interests and bring unique ideas.

Conclusion

Like everything else, perfection comes with practice. Building an extraordinary feedback system does not happen overnight. But for your company’s growth, employees, and yourself, giving and receiving feedback is a crucial leadership skill to master.

Regular feedback loops create a safe, transparent work culture and instill employee confidence. Leaders can point out areas of improvement and help employees navigate roadblocks.
A two-way feedback system also encourages open and honest conversations in the workplace. People don’t feel awkward presenting ideas, regardless of their job position.

A work culture driven by feedback also builds mutual trust between employees and managers, keeping the workflow streamlined. Leaders can boost productivity, engagement, and performance quality by giving and receiving honest feedback and constructive criticism.